To determine which portfolio earns more and by how much, let's analyze the investments of Portfolio 1 and Portfolio 2, along with their respective rates of return (ROR).
Here are the details:
[tex]\[
\begin{tabular}{|c|l|l|l|}
\hline
Investment & Portfolio 1 (\$) & Portfolio 2 (\$) & ROR (\%) \\
\hline
ch Company Stock & 2,800 & 1,275 & 4.99 \\
\hline
ovemment Bond & 3,200 & 2,200 & 6.87 \\
\hline
ink Bond & 950 & 865 & -3.12 \\
\hline
ommon Stock & 1,500 & 1,700 & 9.59 \\
\hline
\end{tabular}
\][/tex]
### Step-by-Step Calculation:
#### Portfolio 1 Earnings:
1. ch Company Stock:
[tex]\[
\$ 2,800 \times \frac{4.99}{100} = \$ 139.72
\][/tex]
2. ovemment Bond:
[tex]\[
\$ 3,200 \times \frac{6.87}{100} = \$ 219.84
\][/tex]
3. ink Bond:
[tex]\[
\$ 950 \times \left(\frac{-3.12}{100}\right) = -\$ 29.64
\][/tex]
4. ommon Stock:
[tex]\[
\$ 1,500 \times \frac{9.59}{100} = \$ 143.85
\][/tex]
Total earnings for Portfolio 1:
[tex]\[
\$ 139.72 + \$ 219.84 - \$ 29.64 + \$ 143.85 = \$ 473.77
\][/tex]
#### Portfolio 2 Earnings:
1. ch Company Stock:
[tex]\[
\$ 1,275 \times \frac{4.99}{100} = \$ 63.6225
\][/tex]
2. ovemment Bond:
[tex]\[
\$ 2,200 \times \frac{6.87}{100} = \$ 151.14
\][/tex]
3. ink Bond:
[tex]\[
\$ 865 \times \left(\frac{-3.12}{100}\right) = -\$ 26.988
\][/tex]
4. ommon Stock:
[tex]\[
\$ 1,700 \times \frac{9.59}{100} = \$ 163.03
\][/tex]
Total earnings for Portfolio 2:
[tex]\[
\$ 63.6225 + \$ 151.14 - \$ 26.988 + \$ 163.03 = \$ 350.8045
\][/tex]
#### Difference and Portfolio Comparison:
- Difference:
[tex]\[
\$ 473.77 - \$ 350.8045 = \$ 122.9655
\][/tex]
Based on the calculations, Portfolio 1 earns more than Portfolio 2 by \[tex]$ 122.97 (rounded to two decimal places).
So, the correct answer is:
Portfolio 1 earns \$[/tex] 122.97 more.
